Seagate to lay off up to 800 local workers

The company is currently offering a voluntary retrenchment programme to the 13,000 people who work at its factories in Nakhon Ratchasima and Theparak district in Samut Prakan.

"We hope that at least 6 percent of them will apply," a spokeswoman at the company headquarters in Scotts Valley, California, told the Bangkok Post yesterday.

The Thai unit produces drives and components including head-gimbal assembly (HGA) and head stack assembly (HSA) units. It has other regional production bases in China, Malaysia and Singapore.

The cost-reduction plan announced last week to deal with the poor global economy targets a reduction of almost 3,000 employees, representing 6 percent of the company's global headcount. The figure includes a previously disclosed 10 percent reduction, or about 800 people, in its US workforce.

"Employees terminating from Seagate would be offered a severance package consistent with company policy," she added.

The measures also include reduced compensation for all levels of executives including the CEO, management and professional employees. The plan, expected to be largely completed by March, is aimed at saving US$210 million per year. Seagate is also making other reductions in operating costs, she said.

The company said it would disclose further information on the savings tomorrow when it releases its financial results. "The world economic recession has affected all industries including Seagate," the spokeswoman said.

"The company continuously assesses market demand and looks for opportunities for operational efficiencies that will help us be cost-effective to meet market requirements.

"This allows us to maintain a strong position in key markets in a very competitive and challenging business environment."

Western Digital (WD), which ranks second to Seagate in the world market, last month announced the closure of one of its four Thai factories. The US-based HDD maker has also shed 600 out of it 20,000 workers in Thailand amid the global market slump.

The industry analysis firm iSuppli said in December that a slowdown in demand for PCs and other electronic products meant that global shipments of hard drives would be flat at best, and might have actually declined during the fourth quarter of 2008 from the third quarter.

The firm forecast that hard drive shipments in 2009 could grow in a range of 4.3 percent to 6.8 percent from 2008, when year-on-year growth was estimated at 15 percent, which was below earlier forecasts.

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